How China's Contracting Economy Impacts U.S.

10/18/2012 9:39AM

China said its economy continued to slow in the third quarter just weeks before it embarks on a once-a-decade change in leadership, compounding concerns about the outlook for one of the world's major engines of growth. Photo: Bloomberg News.

This transcript has been automatically generated and may not be 100% accurate.

... the ... the world's economic engine is sputtering good morning welcome to the New Saab I'm Ralf Winkler ... talking of China of course what's more the country's GDP figures which are coming in low ... may actually still be exaggerated ... by Heard on the Street colleague joined this off the top of the show Tom Orlik ... to take apart the numbers come the morning ... morning world ... you're watching the sea China's GDP dates the ... that the courts that was that was published on Thursday ... I make a great slowing to ... seven point four percent year-on-year ... I'm from seven point six percent ... in the second quarter of the most traded rates since the financial crisis ... Salem so it's in pretty bad news ... of the few dug into the monthly dates that they were actually some signs of stabilization coming through in September ... nd Osterweis progress ... export growth by credit ... or rising in September so I few a few rays of light in the Prix du MIDI to set a date Now ... Tom to break it down trees just remind us why is this on twenty China really is ... the engine is powering the world economy correct so for the United States ... and for Europe ... this is where multinational companies are are finding what meager growth they can find cracked ... I think that's it that's a pretty fair assessment ... China in a the second largest ... economy in the world ... the only major economy in the Wolthers registering of us that continuing to reduce the rapid growth of says lay dying ... is pretty bad news of the one thing which I think I think is also important is the type of grace that China has ... in the Poste China had very rapid growth ... but it was driven almost entirely by investment ... so that was great if you Austria what should be ... a new in exports of iron ore to China ... it was a great kid if you'd like the United States for your new ones to export branded consumer goods to China by the way I mean you you mention Tommy new in your in your story your heart on the Street today which ... is very interesting aam ... in particular admit this fact with ... them and it's going to be calm ... China's from year ... has in the past said the key actually doubts ... the GDP figure still the seven point four percent which is ... slowing a disappointment to some ... may actually be overstated ... what what what he think that ... what does this widespread ... suspicion that the next twelve years statistics ... um is that is cooking the books on China's GDP dates that ... I'm ... my view ... is that it's actually in the last decade we seen considerable means to improve the quality of that they say sniping ... collected mainly centrally I which reduces the scope for McKool provincial safety chiefs to my son's grade upwards ... um but they're still huge dikes of the pitch and use them I'm likely to become China is that creamy and with that leadership transition happens later this year ... in two tries and seven was speaking to us some boxes that I he said that China's GDP and the so the provincial level was my roommate ... I keep referred to the appetite Clayton's electricity consumption rail freight as a more accurate measure of grace ... and if you look at these measures ... China's great is actually considerably slower than that the seven point four percent suggested by GDP ... again ... and again were to do that we just added ... to the impact here for all of us eat again is that this this is the economy gets ... really ... dry being worldwide growth and ... what really is I wanna say by the way that these numbers to really disappoint ... Asian markets in some folks are saying look ... China China's economies been slowing but now it's stabilizing ... what ... what what what is the path from series is we are we Guinea continue trending down is there ... an opportunity for the Chinese govern made it may be to provide more stimulus or or ... twenty think ... well um I think there was some signs of stabilization ... in the September numbers some signs that we get to go into the fourth quarter said ... a little bit stronger on a sequential basis I will say China's government has considerable firepower I'll be MoneyTree and the fiscal front ... inflation is low public debt is relatively low to the need to do more to support short-term great ... they certainly can ... um I think what makes people more worried by ... these China is ... structural reform agenda ... the kind of very challenging reforms which means you made ... to the banking system to the residents' rights to construct a welfare state ... to support a rebalancing of China's economy with a stronger role for consumption ... I'm ... the last set of meat is sold to buy this that any is ... that didn't really do anything ... the big question is all the new leaders ... are going to take the stage of Natural honeycomb grass ... into them but things do any back to ... update ... Tom thank you so much for joining us this morning ...